Investors Pivot Back to Banks

Five years after getting burned in the financial crisis, investors are once again embracing bank bonds.

The reversal is driving up prices and pushing down yields. For the first time since 2007, dollar-denominated bonds issued by banks from around the world are on the verge of yielding less than those of industrial companies, such as AT&T Inc.

Prices of debt issued by financial institutions have risen over the past year,...